District of Columbia officials mishandled millions of dollars in cash, didn’t properly screen contractors and subcontractors, and otherwise misused grants in more than 70 federally funded programs, a new audit has found.
The federal government gave the District more than $1.8 billion in 2006 to aid programs from HIV prevention to counterterrorism. In an overwhelming majority of cases, the handling of federal money in those programs violated local and federal regulations, private audit firm BDO Seidman LLP reported.
Two areas of city government, the public schools and its Medicaid reimbursement program, were so shoddy that they pose a threat to the District’s bond rating, BDO reported.
Written in the dry language of accountants, BDO’s audit of federal program is a scathing indictment of the way the District government managed grants.
In departments from public health to police, auditors found that bureaucrats were handing out millions in contracts without bothering to obtain D.C. Council approval, were sending out payments without invoices or other basic proof that a service had been provided, were providing services to people who may not have needed them and were giving out no-bid contracts without regard to city and federal rules on open bidding.
BDO’s auditors found that:
» Health department officials may have violated federal money management laws in failing to properly distribute $7.4 million that was supposed to provide meals for needy women and their children.
» Child support officials were chronically late notifying fathers of their obligations. In one case, a father who was supposed to begin paying child support in August 2006 wasn’t notified until April 2007.
» School officials still hadn’t mastered their $626 million-plus payroll system, leaving employees without earned raises and making it hard to tell whether everyone was being paid properly.
» In 16 out of 24 costs charged to a special education grant, school officials couldn’t prove that they had used the federal money properly.
» Officials in the city’s foster care agency didn’t bother to obtain permission for at least eight major contracts.
The audit’s findings didn’t surprise D.C. Council member Tommy Wells, D-Ward 6, who served on the city’s school board and now oversees its public health agencies.
“I approach contracting now assuming it’s spotty,” Wells said. “I’m very concerned.”
BDO performed the audit to comply with federal grant regulations. It was paid for by the D.C. finance office, which is supposed to monitor the city’s purse strings. Finance officials slipped it onto their Web site late last week, while Chief Financial Officer Natwar Gandhi was fending off public inquiries into a multimillion-dollar corruption scandal in his tax office.
Got a tip on the city finance office? Call Bill Myers at 202-459-4956 or e-mail [email protected].
